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Should I Buy an Old or New Property?
There are both advantages and disadvantages to buying new and existing properties. Your decision on whether to buy old or new may come down to your motivation for buying, your budget and whether the property will be your home or an investment property.
What Are the Advantages of Buying a New Home?
Buying new is appealing for both property investors and those looking for their own homes. New homes are warm, dry and lower maintenance and often have added luxuries and more modern layouts. If you are involved in the building process you will also have some influence over the design of the home and may be able to tailor it to your own needs.
What Are the Advantages of Buying an Existing Home?
Existing properties may be more affordable as there may be room to negotiate due to the condition of the house, or you may be able to snap up a good deal from a motivated vendor. Older properties also have their own unique character and established gardens which will appeal to some buyers. Buying an existing property also has an advantage in that you can see how the property has increased in value over the years which could be an indicator of future growth.
What Are the Disadvantages of Buying a New Property?
Buying new can be expensive and if you are involved in the build it can sometimes be a long and arduous process. Unexpected costs often drive projects over budget and some delays are to be expected. However, the end result will often be worth the extra stress and when it comes to resale selling a new property definitely has its advantages.
What Are the Disadvantages of Buying an Older Property?
Older properties have character appeal and often have a lot of potential. If you buy a “do-up”, make sure you have the skills, finance and fortitude necessary for the job – like an old car, old homes often come with unexpected challenges. When buying an older home it is imperative that you have a building inspection done so you know what you are taking on. If you buy at the right price you can make money on a renovation, but it’s important to factor in the true costs of your project – and, if you’re planning on doing the work yourself, know what you can legally do yourself and what you must contract out to a specialist.
Is Buying New a Good Idea for Property Investors?
Buying a new property is particularly attractive for investors. The tax advantages of buying a new home are significant. New build properties and purpose-built rentals are eligible for a 20-year exemption from recent tax change laws which were brought in to encourage investment in properties which add to the overall housing supply. The changes removed tax deductions on interest costs for older rental properties, but new properties are exempt from the law. To be eligible properties need to have received their Code of Compliance after March 27, 2021. New properties are more likely to also comply with Healthy Homes regulations, saving the hassle of bringing older properties up to the standard. Healthy Home Compliance is not a given though, even in a new home – a property can meet the requirements for a Code Compliance Certificate but still not meet the Healthy Homes Standard in respect of heating.
What Should Investors Consider When Buying an Older Property?
Although new properties have obvious tax benefits, older properties also have their advantages. Buying an existing property at a lower price and renovating it can significantly increase both the value of the property and the rent you will receive. Useful additions may include adding an extra room, adding parking or even subdividing a property for development. Simple cosmetic changes can also add appeal. However you may run into challenges meeting healthy home standards and you should consider the house maintenance cost of older properties – and never forget to ensure any changes you are contemplating are legally compliant. For renovation tips for rental properties read our recent article.
What Are the Advantages of Buying a Renovated Property?
Buying an already renovated property is appealing, especially if you are buying a home to live in yourself. If the property is not for rental, you don’t need to worry about tax benefits or meeting Healthy Home Guarantee Act regulations. If a property has been recently renovated you will get the benefit of seeing the property in the flesh rather than imagining it on paper plans. You will also remove the months of hassle a renovation will likely cause. A newly renovated house can also retain its period features while offering modern-day luxuries. Although you may pay a premium for a recently renovated property, in the right circumstances renovated homes can tick all the right boxes.
How Can Crockers Help?
If you’re looking to buy a new investment property or are after some straightforward and practical advice on property management issues, contact the Crockers Property Management team at email@example.com